New Laws Target Predatory Financial Practices in NJ


The Governor of New Jersey signed three bills into law last Friday, S-891/A-1557, S-902/A-1559, and A-1556/S-901, that include measures to toughen New Jersey’s antitrust laws.

This legislation, initiated by the Division of Consumer Affairs, aims to protect consumers from exploitative practices associated with tax preparation and refund service contracts by prohibiting misleading marketing and requiring clear disclosures, as well as financial assurances for service contract providers.

These protections, signed into law last week, are particularly important for socially vulnerable communities, including individuals with low and moderate-income and limited English proficiency and people of color, who are often targeted by bad actors in the financial services sectors.

The legislation also enhances the ability of the state Attorney General to enforce these new protections by requiring that private litigants provide notice to the Division of filings in consumer protection cases, and by amending state antitrust law to allow for claims to be brought by parties who are harmed indirectly by anti-competitive action.

The governor signed the following bills into law:

S-891/A-1557 (Scutari, Pou/Moriarty, Stanley, Mukherji) - Prohibits tax preparers from engaging in certain practices involving refund anticipation checks and loans.

S-902/A-1559 (Pou/Moriarty, Stanley, Benson) - Imposes certain consumer protection requirements on service contract providers.

A-1556/S-901 (Moriarty, Stanley, Mukherji/Pou) - Updates notice requirements for actions alleging consumer fraud violations and adds indirect purchasers as parties who can receive damages for antitrust violations.

Primary sponsors of this legislation include Senate President Nicholas Scutari, Senator Nellie Pou, Assemblyman Paul Moriarty, Assemblyman Sterley Stanley, Assemblyman Raj Mukherji, and Assemblyman Daniel Benson.

What are they saying?

“Getting money sooner sounds good at the surface, but it almost always comes with a catch,” said Senate President Nicholas Scutari. “This legislation will prevent tax filing services from deceiving residents and taking money out of the pockets of people who need it the most.”

“Tax filing season represents a chance for relief for Americans who may face difficulty balancing their household budgets. Although these refunds provide a boost at just the right time for many families, the filing process can be difficult to navigate, and low-income families in need of assistance can find themselves exposed to consumer protection risks when working with tax preparation services,” said Senator Nellie Pou. “This law will put the onus on tax preparers to explain fully to clients what is involved in a refund anticipation check, and prohibit them from requiring clients to enter into such agreements.”

“Unscrupulous advertisements for “free” refund anticipation or loan services have misrepresented service fees for far too long. Residents, many times, are left with hundreds of dollars less in their tax refund checks. This is money out of their pockets and household budgets,” said Assemblyman Raj Mukherji. “With this new law, we will stop this deceptive practice and ensure consumers have all of the information they need to make the best decision at tax time.”

“Consumer protections benefit all New Jerseyans,” said Assemblymen Dan Benson and Sterley Stanley. “No one should be taken advantage of when going to get their taxes prepared or simply acquiring a service contract for their home. We must hold businesses accountable and ensure New Jersey residents are confident in carrying out their day-to-day purchases.”

“Consumers have every right to clear representation of any service offered by a company, especially when it applies to their tax refunds, one of the largest payments an individual receives each year," said Assemblyman Paul Moriarty. "This legislation along with the other two measures maintains an even playing field for consumers and businesses. Addressing situations many New Jersey residents have faced, these measures are essential protection for New Jersey consumers."

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